Mitsubishi Buys into Stillwater’s Marathon Project

Stillwater Mining announced in late March 2012 an agreement with Mitsubishi Corp. whereby Mitsubishi will acquire a 25% interest in Stillwater’s Marathon platinum group metals (PGM) and copper project in northwest Ontario for approximately $81.25 million. Mitsubishi also will meet the venture’s first cash call of $13.6 million, for a combined total cash payment of $94.6 million.

Mitsubishi will be responsible for funding its 25% share of operating, capital and exploration expenditures on the Marathon properties and has agreed to cooperate and support efforts to secure project financing. Under a related supply agreement, Mitsubishi also will have an option to purchase up to 100% of Marathon’s PGM production.

The Marathon deposit is located about 10 km north of the town of Marathon, Ontario, near the north shore of Lake Superior. Stillwater acquired the property in November 2010. The town of Marathon is situated on the Trans-Canada Highway about 300 km east of the city of Thunder Bay. The project is currently in the environmental assessment and permitting stage.

Once approved, the Marathon project would include development of an open-pit mine and milling operation, with one primary pit and several smaller satellite pits. Concentrates produced at Marathon would be transported off-site to a third-party smelter and refinery for final processing. Initial projections suggest the mine would produce about 200,000 oz/y of PGMs (mostly palladium) and 37 million lb/y of copper over a mine life of about 11.5 years.

Pre-production capital cost of the Marathon project is currently estimated at between $550 million and $650 million, with first production of PGMs and copper in about 2016, subject to orderly receipt of approvals. Outside of amounts provided through project financing, Stillwater and Mitsubishi will be responsible for separately funding their respective interests in the project. To date, Stillwater has invested about $159 million in the properties.

Commenting on the transaction, Stillwater Chairman and CEO Frank McAllister said, “For a number of years we at Stillwater have recognized the critical need to grow and diversify the company’s production, which at present is limited to our PGM operations along the J-M Reef in Montana. Consequently, we were very pleased to acquire Marathon in 2010. We recognized early on that the development of Marathon likely would require raising new capital and/or bringing in a partner. In this regard, we are delighted to have the support of Mitsubishi.”

EMJ Sidebar 02 (aka BoomBox_02)

Calendar

EMJ Sidebar 03 (aka BoomBox_03)

Follow Us

This website uses cookies to improve site functionality and to provide you with a better browsing experience. Detailed information on the use of cookies on this site, and how you can decline them, is provided in our Privacy Policy. By using this site or clicking on "Accept and Close," you consent to the use of cookies.

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.